Employment

It is a truism in Silicon Valley that star employees are worth ten to one hundred times as much as ordinary employees. This calculus is especially true for software engineers, but also applies to product managers, sales executives, and other key employees. If you are a star performer, the sky’s the limit in terms of what technology companies will be willing to attract or keep you. We’ve seen this again and again. Facebook bought Friendfeed for $50 million just to get its highly talented engineers (co-founder Brett Taylor is now Facebook’s CTO). Last year, Google made a $3.5 million counteroffer to a staff engineer to keep him from going to Google. And this year, it paid two top product managers as much as $150 million to keep them from going to Twitter. Hire stars, and not only will they work harder than everyone else, but they will also lift the performance of the entire company. I’ve witnessed this happen at both technology and media companies. The stars come in and raise t...

Robert Lucas offers the following as one of his reasons for the persistence of the Great Recession: Likelihood of much higher taxes, focused on the “rich” Gavyn Davies and Paul Krugman argue that the Lucas attempt to explain the persistence of the Great Recession on purely classical principles lacks credibility with Davies noting: As yet, there has been no increase in taxation, on the rich or anyone else. Nor have the Obama administration’s medical and financial sector reforms really taken effect. It would take a remarkably far sighted private sector to have already reacted adversely to this set of long term reforms, even if they might do so eventually. One could argue, however, that the Barro reformulation of Ricardian Equivalence would argue that it is not current taxation that matters but the expectation of future taxes when government spending outstrips taxes. But if one is basing one’s argument thusly, I don’t see what has fundamentally changed in the past few years. We knew ...